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SFO reviews Barings

George Staple, the Director of the Serious Fraud Office, said yesterday that he would not rule out prosecutions in the UK as a result of the collapse of Barings, the investment bank.

Speaking to the Treasury Select Committee at the House of Commons, Mr Staple said that the SFO would act if it unearthed evidence of criminal wrongdoing, if it judged that it was in the public interest to prosecute and if it believed it had a realistic prospect of securing a conviction of those it charged.

He was responding to fierce pressure from the Labour MP Brian Sedgemore, who said that he had presented relevant evidence of criminal wrongdoing to the SFO three weeks ago. At that time, Mr Sedgemore said, the SFO told him its inquiries pointed to incompetence at Barings rather than wrongdoing.

Mr Staple said that the inquiry had "moved on" since then and he that he hoped to complete the investigation as soon as possible.

The SFO has been working closely with the Bank of England, which is conducting its own investigation, since early March. The Bank has already said it will liaise with the law enforcement agencies where appropriate.

The Bank says that it will complete its own investigation by the early part of July and then hand it over to the Chancellor of the Exchequer, Kenneth Clarke. It is then up to the Chancellor to decide when the report is published but he has said that it will be published.

Barings, now owned by the Dutch banking group ING, collapsed in February under the weight of more than $1bn in losses that have been blamed on Nick Leeson, a Singapore-based derivatives traders at the bank. Mr Leeson is being held in Frankfurt pending an extradition request by Singapore.

Mr Staple said extradition could not be ruled out but he gave a broad hint he thought it unlikely. Some cases, he said, lent themselves to prosecution in other jurisdictions. Mr Leeson is fighting to have the case against him heard in the UK.

Mr Staple defended his office from criticism over its failure to win several high-profile fraud cases in recent years, although he said the SFO's overall conviction rate of 62 per cent over the past seven years could certainly be improved upon.